QUESTION
Eric, Please tell me that you are not contemplating or planning a reverse split. This would be the worst thing you could do at this point. IMO. You are growing the company, please don’t waste the co.s potential with a r/s.
ANSWER
Short Answer:
You should count on an eventual reverse split. The company has always taken the position that a R/S in connection with an uplisting has justification and purpose. It will ensure that the company can grow through access to financing that is less expensive and more predictable. We are serious about attaining registration and uplisting. These things usually go together, as previously (and publicly) stated.
More detail if you are interested:
It is not responsible for the company to think aloud, i.e. publicly, about the operating specifics of various re-financing scenarios because they are subject to factors beyond our control, including the stance of legal counsel, auditors and regulators, all of whom have to approve. A feature of our thinking is how to recognize the special category of investor who has been with the firm for a long time, or has accumulated a high dollar investment cost. This is difficult because it is so unusual; there are not as many precedents to draw upon – and this must also be within regulations. Like many difficult things, it’s worth the effort to try.
To say that an R/S is the “worst thing” is mistaken. The “worst thing” would be for the company to be unable to carry on or meet its obligations with sufficient professionalism so as to justify its relationship with top retailers. A company’s ability to continually reinvest in practical things that support such retailer listings is a requirement of doing business with them. We have several excellent relationships that must be maintained to a high standard of reliability – supplier to customer.
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However, when the business becomes a fully reporting issuer quoted on the OTCQB (as a next logical step) – doors open to friendlier financing. There is no dispute about that within the investment community. Fully reporting status removes barriers to positive options
Amongst our peers, Winning Brands is known to be serious in purpose, determined in its mission and far better than most in shareholder communications. Moving up to the next level is what our shareholders need in order for new momentum to be realized. Accomplishing this will be beneficial for the company in many ways, which in turn can be reflected in market cap. The impact of a R/S can only be assessed some time after the fact by examining the long term impact on market cap. The “typical” R/S in the Pink Sheet space is not the only available model.
Beyond the “hype” on the subject of R/S’s they do not have to be disastrous. Much depends on the motive, the context, the specifics, the subsequent events. Cynical R/S’s are a lazy way to increase the share price. A company embarking on the path of registration is not lazy.
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